Bonneville Power Administration Integrated Program Review Depreciation, Amortization, Net Interest, and Debt Management June 26, 2008 - BPA ...
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Bonneville Power Administration
Integrated Program Review
Depreciation, Amortization, Net Interest, and
Debt Management
June 26, 2008
BPA Integrated Program Review 1BPA’s Financial Disclosure Information
1. For forecasts, “all FY 2009-11 information was provided in May and June 2008 and cannot be
found in BPA-approved Agency Financial Information but is provided for discussion or
exploratory purposes only as projections of program activity levels, etc.”
2. For actuals, “all FY 2006-07 information was provided in May 2008 and is consistent with
audited actuals that contain BPA-approved Agency Financial Information.”
3. This information is a derived estimate for presentation purposes and cannot be found in BPA-
approved Agency Financial Information but is provided for discussion or exploratory purposes
only as projections of program activity levels, etc.”
BPA Integrated Program Review 2Agenda 1. Purpose and Objective of Workshop 2. Financial Disclosure Statements 3. Putting Today’s Discussion in Perspective 4. Power Capital-Related Expenses 5. Transmission Capital-Related Expenses 6. Debt Management Actions 7. Access to Capital Update 8. Lease Financing Overview 9. IPR Workshop Schedule 10. How To Provide Comments BPA Integrated Program Review 3
Purpose & Objective
• Provide an overview of the current Power and Transmission forecasts of capital-related
expenses:
• Depreciation and Amortization
• Federal Net Interest
• Non-Federal Debt Service
• Minimum Required Net Revenues (MRNR)
• Transmission Capital Leases
• Provide an overview of BPA’s debt management activities and issues:
• Debt Optimization/Debt Service Reassignment
• Update on Access to Capital
• Lease Financing
BPA Integrated Program Review 4Putting Today’s Discussion in Perspective
• The costs associated with the traditional capital-related expenses -- Depreciation & Amortization,
Federal Net Interest expense, and Non-Federal Debt Service -- are significant drivers of rate
levels. These costs represent about one-third of Power’s total expenses and about half of
Transmission’s total expenses.
• These costs are driven by broad-based agency decisions and policies related to capital
investment levels.
• Corporate Finance responds to these decisions and the associated timing parameters by
developing the optimal, most efficient debt management actions leading to the lowest costs
overall.
• The actual costs in the package are the aggregate result of past decisions.
• The forecasted costs in this package reflect the result of past decisions, forecasts of future
spending levels, existing policies, and assumptions about other decisions.
• Capital spending levels are not within the scope of today’s presentation. The appropriate forums
are the related program sessions of the IPR.
• Debt management actions are within the scope of today’s session.
BPA Integrated Program Review 5What Are These Programs?
• These “programs” are really categories of expenses derived from actions taken in several other programs. These
categories represent the financial outcomes of decisions in other areas.
• Depreciation & Amortization: This category consists of annual expenses associated with Power and
Transmission plant-in-service and intangible assets, respectively.
• Net Interest Expense:
• For Power, this category consists of the interest on outstanding Treasury bonds and Congressional
appropriations, an interest credit, amortization of capitalized call premiums, the capitalization adjustment,
and the allowance for funds used during construction.
• For Transmission, this category includes the same categories as Power plus the interest associated with
Debt Service Reassignment (DSR) within the Debt Optimization (DO) Program.
• Non-Federal Debt Service:
• For Power, this category consists of third-party debt service or payment of costs associated with capitalized
contracts and other long-term, fixed contractual obligations. Debt service costs on the Energy Northwest
(EN) projects make up the majority of these costs.
• For Transmission, this category consists of AFUDC and interest accruing on customer balances associated
with network upgrades under Large Generator Interconnection Agreements (LGIA).
• Minimum Required Net Revenues (MRNR): As necessary, revenue requirements include MRNR to ensure
coverage of annual cash requirements. It is calculated as the amount by which BPA’s payments to Treasury for
amortization and irrigation assistance exceed the total of non-cash expenses and revenues. MRNR is a
ratemaking construct only. It does not appear in audited financial statements as an expense.
• Capital Leases: This category affects Transmission only. Capital leases are part of Transmission Operations
and Maintenance. As presented here, this category is the lease payments for various capital projects such as
Schultz-Wautoma and projects financed through the Master Lease program.
BPA Integrated Program Review 6The Role of the Repayment Study
• The primary purpose of the repayment study is to determine a schedule of Federal principal
payments that satisfies the statutory requirement to set rates to assure timely repayment of the
Federal investment.
• Repayment studies are conducted for each year in a rate test period. Each annual study includes
outstanding bonds and appropriations as of the most recent year of actual data and projected
repayment obligations through the year of the study. Funding for replacements projected during
the repayment period also is included in the repayment study, consistent with the requirements of
RA 6120.2.
• Annual debt service streams for non-Federal payment obligations are included as fixed
requirements that the study must take into account in establishing the overall levelized debt
service. This reflects the priority of revenue application in both policy and statute in which these
obligations have a higher priority of repayment. The study schedules the repayment of Federal
debt around these obligations.
• That schedule, with the resulting Federal interest payments, the non-Federal debt service
requirements and, in generation, Federal irrigation assistance, is the lowest, levelized combined
debt service for the study year and over the ensuing repayment period.
BPA Integrated Program Review 7Power Capital-Related Expenses BPA Integrated Program Review 8
Power Repayment Study Assumptions
• The repayment study used in this analysis included updates of historical debt management
actions as well as assumptions about future actions. The more significant of these updates and
assumptions are listed below.
• Historical Federal actions through FY 2007
• 2007 Supplemental Rate Case Federal amortization for FY 2009
• Debt Optimization of $37 million for FY 2008 (no projection of future DO)
• Spring 2008 refinancings of EN debt
• 15 percent lapse factor applied to projected Federal investments
• The repayment study assumption about CRFM investment has been updated since the IPR
kickoff workshop to take into account the updated forecast.
• There are additional updates that are likely to happen prior to the Initial Proposal.
• The database of historical Federal investments will be updated for FY 2008 transactions.
• The non-Federal database will be updated for additional refinancing actions taken in FY
2008.
• The interest rate forecast will be updated in the fall.
BPA Integrated Program Review 9Power Function Capital Expenditures
Actuals for FY 2006-2007, Forecasted FY 2009-2013
UPDATED Rate Case
$ in Thousands Actuals SOY Average IPR IPR IPR IPR IPR
Description FY 2006 FY 2007 FY 2008 FY 2008-09* FY 2009 FY 2010 FY 2011 FY 2012 FY 2013
Corps of
Engineers/Bureau of
Reclamation 120,561 108,351 162,488 150,301 154,950 183,200 199,200 208,200 220,200
Fish & Wildlife 35,000 35,000 36,000 36,000 50,000 70,000 60,000 50,000 50,000
Conservation 20,000 7,000 42,000 32,000 42,000 56,000 56,000 56,000 56,000
1/
CGS 74,501 82,926 44,464 26,900 96,700 73,600 99,900 55,200 47,700
CRFM 366,165 49,410 60,000 68,300 110,000 88,000 96,000 50,000 0
2/
15% lapse factor (29,813) (36,150) (38,550) (39,900) (41,700)
Total Capital 616,227 282,687 344,952 313,501 423,837 434,650 472,550 379,500 332,200
Total Increase/Decrease * (333,540) 62,265 78,885 10,813 37,900 (93,050) (47,300)
1/
CGS values are in Energy Northwest fiscal year.
2/
Lapse Factor does not include Fish & Wildlife, CGS, or CRFM
*Change is calculated from the prior year. The “Rate Case Average” column is not used in calculations of increases and decreases.
UPDATE FROM THE KICKOFF WORKSHOP
• The forecast for the Columbia River Fish Mitigation (CRFM) program has been revised to reflect the latest
assumptions about when plant will go into service.
See Financial Disclosure Statements on Page 2
BPA Integrated Program Review 10Power Net Interest, Amortization, Depreciation &
Non-Federal Debt Service
UPDATED
Rate Case Rate
$ in Thousands Actuals SOY Average Case IPR IPR IPR
FY 2006 FY 2007 FY 2008 FY 2008-09 FY 2009 FY 2009 FY 2010 FY 2011
Program Level Spending 848,119 788,123 897,281 916,200 937,370 913,029 937,276 987,700
Increase/Decrease * (59,995) 109,157 40,089 (24,341) 24,248 50,424
* For FY 2006-2008, Rate Case FY 2009, 2010 and 2011, change is from the prior year. For FY 2009 Forecast, change is calculated from “Rate Case”.
Program Background:
• Program components
• Net interest – Comprised of interest on bonds and appropriations netted against interest credit from the
Bonneville Fund.
• Depreciation – The depreciation of revenue-producing assets and on-going infrastructure investments through
BPA, direct funding for Corps of Engineers (COE) and Bureau of Reclamation (USBR) hydro projects, and
appropriated investment for fish mitigation program at hydro projects managed by the Corps of Engineers.
• Amortization – The depreciation of non-revenue producing assets such as conservation and direct fish and
wildlife capital investments (non-appropriated).
• Non-Federal Debt Service – Comprised of debt service or payments associated with capitalized contracts and
other long-term, fixed contractual obligations. The majority of this category consists of debt service on Energy
Northwest projects (e.g. CGS, WNP-1, and WNP-3).
Drivers of Change:
• Increased capital investment, particularly in conservation and BPA’s Fish and Wildlife Program, results in higher
costs in FYs 2010-2011.
• Change in projected interest income due to change in cash balances.
• Debt management actions.
See Financial Disclosure Statements on Page 2
BPA Integrated Program Review 11Where do these categories appear in the
Power Revenue Requirement?
Bold Typeface = Affected Category
GENERATION REVENUE REQUIREMENT GENERATION REVENUE REQUIREMENT
INCOME STATEMENT STATEMENT OF CASH FLOWS
1 OPERATING EXPENSES 1 CASH FROM OPERATING ACTIVITIES
2 POWER SYSTEM GENERATION RESOURCES 2 MINIMUM REQUIRED NET REVENUES 1/
3 OPERATING GENERATION RESOURCES 3 NON-CASH ITEMS:
4 OPERATING GENERATION SETTLEMENT PAYMENTS 4 DEPRECIATION AND AMORTIZATION
5 NON-OPERATING GENERATION 5 AMORTIZATION OF CAPITALIZED BOND PREMIUMS
6 CONTRACTED POWER PURCHASES 6 CAPITALIZATION ADJUSTMENT
7 RESIDENTIAL EXCHANGE PROGRAM 7 ACCRUAL REVENUES
8 RENEWABLE AND CONSERVATION GENERATION 8 CASH PROVIDED BY OPERATING ACTIVITIES
9 TRANSMISSION ACQUISITION AND ANCILLARY SERVICES
10 POWER NON-GENERATION OPERATIONS 9 CASH FROM INVESTMENT ACTIVITIES:
11 F&W/ENVIRONMENTAL REQUIREMENTS 10 INVESTMENT IN:
12 GENERAL AND ADMINISTRATIVE 11 UTILITY PLANT (INCLUDING AFUDC)
13 OTHER INCOME, EXPENSES AND ADJUSTMENTS 12 CONSERVATION
14 NON-FEDERAL DEBT SERVICE 13 FISH & WILDLIFE
15 DEPRECIATION AND AMORTIZATION 14 CASH USED FOR INVESTMENT ACTIVITIESS
16 TOTAL OPERATING EXPENSES
15 CASH FROM BORROWING AND APPROPRIATIONS:
17 INTEREST EXPENSE: 16 INCREASE IN BONDS ISSUED TO U.S. TREASURY
18 INTEREST ON FEDERAL INVESTMENT- 17 REPAYMENT OF BONDS ISSUED TO U.S. TREASURY
19 APPROPRIATED FUNDS 18 INCREASE IN FEDERAL CONSTRUCTION APPROPRIATIONS
20 BONDS ISSUED TO U.S. TREASURY 19 REPAYMENT OF FEDERAL CONSTRUCTION APPROPRIATIONS
21 INTEREST CREDIT ON CASH RESERVES 20 PAYMENT OF IRRIGATION ASSISTANCE
22 AMORTIZATION OF CAPITALIZED BOND PREMIUMS 21 CASH PROVIDED BY BORROWING AND APPROPRIATIONS
23 CAPITALIZATION ADJUSTMENT
24 ALLOWANCE FOR FUNDS USED DURING CONSTRUCTION 22 ANNUAL INCREASE (DECREASE) IN CASH
25 NET INTEREST EXPENSE
23 PLANNED NET REVENUES FOR RISK
26 TOTAL EXPENSES
24 TOTAL ANNUAL INCREASE (DECREASE) IN CASH
27 MINIMUM REQUIRED NET REVENUES 1/
28 PLANNED NET REVENUES FOR RISK
29 TOTAL PLANNED NET REVENUES (27+28) 1/ Line 22 must be greater than or equal to zero, otherwise net revenues
will be added so that there are no negative cash flows for the year.
30 TOTAL REVENUE REQUIREMENT
1/ SEE NOTE ON CASH FLOW STATEMENT
BPA Integrated Program Review 12Power Depreciation & Amortization Expense
UPDATED Rate
Case Rate
$ in Thousands Actuals SOY Average Case IPR IPR IPR
FY 2006 FY 2007 FY 2008 FY 2007-09 FY 2009 FY 2009 FY 2010 FY 2011
Program Level Spending 181,878 176,204 187,891 197,912 205,857 193,165 204,001 216,916
Increase/Decrease * (5,674) 11,687 17,966 (12,692) 10,836 12,915
* For FY 2006-2008, Rate Case FY 2009, 2010 and 2011, change is from the prior year. For FY 2009 Forecast, change is calculated from “Rate Case”.
• Depreciation and amortization are the annual expenses associated with FCRPS plant-in-service and intangible
assets, respectively. These non-cash expenses are the systematic distribution of the original cost of the assets
over their estimated useful lives.
• The primary driver for these expenses is the level of capital investment, particularly in prior rate periods.
• This forecast is an update from the IPR Kickoff workshop to reflect the revised CRFM forecast.
Program Components of $210 million per year average annual expense for FY 2010-2011:
53% COE/USBR – investment in power portion of hydro projects, including Columbia River Fish Mitigation
(CRFM) and Lower Snake hatcheries
5% Power - investment in capital equipment (IT and furniture), including share of Corporate
12% Fish and Wildlife (F&W) - investment in BPA’s Fish and Wildlife direct program
12% Legacy Conservation – investments in BPA’s original conservation capital program, FYs 1982-1999
6% Conservation Augmentation (ConAug) – investments in BPA ‘s conservation capital program during FYs
2002-2006
11% Conservation Acquisition (ConAcq) – investments in BPA’s conservation capital program during FYs
2007-2011 See Financial Disclosure Statements on Page 2
BPA Integrated Program Review 13Power Depreciation & Amortization for
FY 2010–2011 Rate Period
($Thousands) 2010 2011
Depreciation
BPA General 10,671 10,341
Bureau of Reclamation 23,687 25,592
Corps of Engineers 79,054 80,228
USFW -- Lower Snake 3,166 3,166
Sub-Total 116,578 119,327
Amortization
Fish & Wildlife 24,440 27,021
Legacy Conservation 25,289 23,439
ConAug 13,335 13,335
ConAcq 19,403 28,838
SFAS 71 (CRFM Studies) 4,955 4,955
Sub-Total 87,423 97,589
Total 204,001 216,916
FY 2010 – 2011 Risks & Opportunities:
• Since depreciation and amortization are direct results of the level of capital investment, they will increase or
decrease based on capital investment decisions and actual plant-in-service.
• This forecast applies the 15 percent lapse factor evenly across all of the affected categories. The forecast will
be different if the lapse factor were applied differently.
See Financial Disclosure Statements on Page 2
BPA Integrated Program Review 14Power Net Interest Expense
UPDATED
Rate Case
$ in Thousands Actuals SOY Average Rate Case IPR IPR IPR
FY 2006 FY 2007 FY 2008 FY 2007-09 FY 2009 FY 2009 FY 2010 FY 2011
Program Level Spending 157,609 145,516 169,748 169,958 177,499 161,996 177,092 193,721
Increase/Decrease * (12,093) 24,232 7,750 (15,503) 15,096 16,629
* For FY 2006-2008, Rate Case FY 2009, 2010 and 2011, change is from the prior year. For FY 2009 Forecast, change is calculated from “Rate Case”.
• This category was updated to reflect the change in CRFM investments.
• The major components of Net Interest Expense are:
1. Interest on outstanding bonds and appropriations. For Power, bonds issued to the U.S. Treasury by
BPA are for capital equipment, F&W, conservation and the direct-funding of COE and USBR
investments. Congressional appropriations are for the power portion of COE and USBR hydro projects,
including F&W.
2. Interest credit. A significant variable is an interest credit associated with interest income from cash in
the BPA Fund attributable to Power cash flows.
3. Amortization of certain cash events. These include the non-cash expenses for amortization of
capitalized bond premiums and the capitalization adjustment resulting from the BPA Appropriations
Refinancing Act.
4. Allowance For Funds Used During Construction (AFUDC). This is included to offset bond interest
used to fund assets under construction.
See Financial Disclosure Statements on Page 2
BPA Integrated Program Review 15Power Net Interest for FY 2010-2011 Rate Period
($Thousands) 2010 2011
Interest on Federal Investment -
On Appropriated Funds 223,743 228,979
On Long-Term Debt 70,986 81,558
Interest Credit (61,120) (60,295)
Amort of Cap Bond Prem 185 185
Capitalization Adjustment (45,937) (45,937)
AFUDC (10,765) (10,770)
Net Interest Expense 177,092 193,721
FY 2010 – 2011 Risks & Opportunities:
• Non-Federal debt management actions can change the shape of Federal debt service when calculated in
the Repayment Study.
• Updates to the interest rate forecast can raise or lower debt service on projected borrowing.
• Cash in the Bonneville Fund that is attributed to Power affects the calculation of the Interest Credit.
• The effect of the phase out of the Interest Offset Credit (IOC) and implementation of Market-based
Investing is not yet known. The IOC will be phased out over 10 years.
See Financial Disclosure Statements on Page 2
BPA Integrated Program Review 16Power Non-Federal Debt Service Expense
Rate Case
$ in Thousands Actuals SOY Average Rate Case IPR IPR IPR
FY 2006 FY 2007 FY 2008 FY 2007-09 FY 2009 FY 2009 FY 2010 FY 2011
Program Level Spending 508,632 466,404 539,641 548,331 554,014 557,867 556,184 577,064
Increase/Decrease * (42,228) 73,238 14,373 3,853 (1,684) 20,880
* For FY 2006-2008, Rate Case FY 2009, 2010 and 2011, change is from the prior year. For FY 2009 Forecast, change is calculated from “Rate Case”.
• Non-Federal debt service consists of 3rd Party arrangements with the following entities: Energy Northwest (EN-
Nuclear Plants), Lewis County PUD (Cowlitz Falls Hydro Project), Conservation and Renewable Energy System
(CARES), Northern Wasco (McNary), City of Tacoma, and Emerald PUD.
• Debt service for EN consists of: principal, interest, investment income, reserve & contingency funds, treasury
services fees, and other miscellaneous items.
• Debt service for Lewis County, CARES, Northern Wasco, City of Tacoma, and Emerald is paid directly by BPA
and consists of principal and interest only.
• Non-Federal debt service is not level year by year. The primary factor that drives the debt service level in a given
year is the amount of maturing principal in that year.
See Financial Disclosure Statements on Page 2
BPA Integrated Program Review 17Power Non-Federal Debt Service
for FY 2010-2011 Rate Period
2010 2011
Energy Northwest
CGS 234,040 227,926
WNP-1 DEBT SVC 160,376 162,234
WNP-3 DEBT SVC 142,923 168,221
EN RETIRED DEBT - -
EN LIBOR SWAP - -
Sub-Total 537,339 558,381
Non-Energy Northwest
TROJAN - -
CONSERVATION 5,079 4,924
COWLITZ FALLS 11,566 11,563
N. WASCO 2,200 2,196
Sub-Total 18,845 18,683
TOTAL 556,184 577,064
FY 2010 – 2011 Risks & Opportunities:
• Debt Optimization is forecasted to continue through 2009 only
• Potential debt extension associated with CGS license extension
• Refinancing for savings or potential restructuring opportunities
See Financial Disclosure Statements on Page 2
BPA Integrated Program Review 18Power Minimum Required Net Revenues
• As necessary, revenue requirements include a component, minimum required net revenues, to ensure coverage of
annual cash requirements. It is calculated as the amount by which BPA’s payments to Treasury for amortization
and irrigation assistance exceed the total of non-cash expenses and revenues.
MINIMUM REQUIRED NET REVENUES CALCULATION
($THOUSANDS)
2010 2011 Average
1 CASH FROM OPERATING ACTIVITIES
3 EXPENSES NOT REQUIRING CASH:
4 DEPRECIATION AND AMORTIZATION 204,001 216,916 210,459
5 AMORTIZATION OF CAPITALIZED BOND PREMIUMS 185 185 185
6 CAPITALIZATION ADJUSTMENT (45,937) (45,937) (45,937)
7 ACCRUAL REVENUES (3,524) (3,524) (3,524)
8 CASH PROVIDED BY OPERATING ACTIVITIES 154,725 167,640 161,183
9 CASH REQUIREMENTS
10 REPAYMENT OF BONDS ISSUED TO U.S. TREASURY 174,749 20,000 97,375
11 REPAYMENT OF FEDERAL APPROPRIATIONS 2 108,802 54,402
12 PAYMENT OF IRRIGATION ASSISTANCE - - -
13 TOTAL CASH REQUIREMENTS 174,751 128,802 151,777
14 MINIMUM REQUIRED NET REVENUES (13 - 8) 20,026 - 10,013
• Due to the shape of the cash flows, it may be possible to shift amortization from FY 2010 to FY 2011 to reduce
or eliminate MRNR in FY 2010. BPA staff will examine this possibility prior to the WP-10 Initial Proposal.
See Financial Disclosure Statements on Page 2
BPA Integrated Program Review 19Transmission Capital-Related Expenses BPA Integrated Program Review 20
Transmission Repayment Study Assumptions
The repayment study used in this analysis included updates of historical debt management actions as well as
assumptions about future actions. The more significant of these updates and assumptions are listed below.
• Historical Federal actions through FY 2007
• 15 percent lapse factor applied for projected Federal investments
• 2008 Rate Case amortization for FY 2009
• Debt Service Reassignment (DSR) of $110 million for FY 2008
• Spring 2008 refinancings of EN debt
• Lease financing actions through April 2008 (no projected lease financing in repayment studies)
• $15 million per year of revenue/reserve financing
• Repayment study assumptions have been updated since the IPR Kickoff workshop.
• There were corrections to the lease financing payment stream used in the study.
• We modified assumptions about when some Federal debt will be paid.
• There are additional updates that are likely to happen prior to the Initial Proposal.
• The database of historical Federal investments will be updated for 2008 transactions.
• The non-Federal database will be updated for additional non-Federal refinancing actions occurring in FY
2008.
• The non-Federal database will be updated for additional lease financing transactions.
• The interest rate forecast should be updated in the fall.
• Staff are also considering other alternative assumptions that may reduce overall debt service.
BPA Integrated Program Review 21Transmission Function Capital Expenditures
Actuals FY 2006-2007, Proposed FY 2009-2012
Rate Case
$ in Thousands Actuals SOY Average IPR IPR IPR IPR
Transmission Description FY 2006 FY 2007 FY 2008 FY 2008-2009 FY 2009 FY 2010 FY 2011 FY 2012
Main Grid $ 7,278 $ 17,258 $ 31,777 $ 76,477 $ 71,832 $ 155,904 $ 221,346 $ 199,945
Area & Customer Service $ 326 $ 1,240 $ 6,099 $ 16,893 $ 19,681 $ 31,714 $ 6,256 $ 6,322
Upgrades & Additions $ 38,033 $ 36,398 $ 60,947 $ 41,854 $ 59,881 $ 91,108 $ 107,471 $ 69,009
System Replacements $ 47,599 $ 63,728 $ 62,285 $ 63,168 $ 102,717 $ 134,494 $ 138,423 $ 109,335
1/
Customer Financed/Credits $ 23,674 $ 61,336 $ 71,775 $ 61,923 $ 84,427 $ 90,165 $ 102,287 $ 83,904
Environment $ 2,602 $ 3,904 $ 3,705 $ 5,290 $ 5,213 $ 5,530 $ 5,752 $ 5,869
Total Direct Capital $ 119,512 $ 183,864 $ 236,588 $ 265,605 $ 343,751 $ 508,915 $ 581,535 $ 474,384
2/
Total Indirect Capital $ 66,944 $ 64,435 $ 70,895 $ 77,550 $ 81,246 $ 86,100 $ 88,696 $ 93,126
Total Capital Sub-Total $ 186,456 $ 248,299 $ 307,483 $ 343,155 $ 424,997 $ 595,015 $ 670,231 $ 567,510
15% Lapse Factor $ - $ - $ - $ - $ (64,021) $ (89,551) $ (101,324) $ (85,736)
Total $ 186,456 $ 248,299 $ 307,483.0 $ 343,155 $ 360,976 $ 505,464 $ 568,907 $ 481,774
Total Increase/Decrease From Prior Year $ 61,843 $ 59,184.0 $ 53,493 $ 144,488 $ 63,443 $ (87,133)
1/ Includes Radio Spectrum and PFIA projects
2/ Includes AFUDC
See Financial Disclosure Statements on Page 2
BPA Integrated Program Review 22Transmission Net Interest, Amortization,
Depreciation & Non-Federal Debt Service
UPDATED Rate Case
$ in Thousands Actuals SOY Average Rate Case IPR IPR IPR
FY 2006 FY 2007 FY 2008 FY 2008-09 FY 2009 FY 2009 FY 2010 FY 2011
Program Level Spending 307,457 311,510 315,702 364,567 375,020 329,817 357,323 384,892
Increase/Decrease * 4,053 4,192 59,319 (45,203) 27,505 27,569
* For FY 2006-2008, Rate Case FY 2009, 2010 and 2011, change is from the prior year. For FY 2009 Forecast, change is calculated from “Rate Case”.
Program Background:
• Program components
• Net interest – Comprised of Debt Service Reassignment interest and interest on Federal bonds and
appropriations netted against interest credit from the Bonneville Fund.
• Depreciation – The depreciation of revenue-producing assets and on-going infrastructure investments.
• Amortization – The depreciation of regulatory assets such as spacer dampers and non-wires solutions.
• Non-Federal Debt Service – Comprised of interest that accrues on customer balances for network upgrades
associated with LGIA contracts.
Drivers of Change:
• Increased capital investment results in higher costs in FYs 2010-2011.
• Change in projected interest income due to change in cash balances.
• Debt management actions.
See Financial Disclosure Statements on Page 2
BPA Integrated Program Review 23Where do these categories appear in the
Transmission Revenue Requirement?
Bold Typeface = Affected Category
Transmission Revenue Requirement Transmission Revenue Requirement
Income Statement Statement of Cash Flows
1 OPERATING EXPENSES 1 CASH FROM CURRENT OPERATIONS:
2 OPERATION AND MAINTENANCE 2 MINIMUM REQUIRED NET REVENUES 1/
3 TRANSMISSION ACQ & ANCILLARY SERVICES 3 EXPENSES NOT REQUIRING CASH:
4 NON-FEDERAL PROJECTS DEBT SERVICE 4 DEPRECIATION & AMORTIZATION
5 DEPRECIATION & AMORTIZATION 5 NON-FEDERAL PROJECTS DEBT SERVICE
6 TOTAL OPERATING EXPENSES 6 AMORTIZATION OF CAPITALIZED BOND PREMIUMS
7 CAPITALIZATION ADJUSTMENT
7 INTEREST EXPENSE 8 ACCRUAL REVENUES (LGIA revenue credits)
8 DEBT SERVICE REASSIGNMENT INTEREST 9 ACCRUAL REVENUES (AC INTERTIE/FIBER)
9 INTEREST ON FEDERAL INVESTMENT - 10 CASH PROVIDED BY CURRENT OPERATIONS
10 ON APPROPRIATED FUNDS
11 ON LONG-TERM DEBT
12 INTEREST INCOME 11 CASH USED FOR CAPITAL INVESTMENTS:
13 AMORTIZATION OF CAPITALIZED BOND PREMIUMS 12 INVESTMENT IN:
14 CAPITALIZATION ADJUSTMENT 13 UTILITY PLANT
15 AFUDC 14 CASH USED FOR CAPITAL INVESTMENTS
16 NET INTEREST EXPENSE
15 CASH FROM TREASURY BORROWING AND APPROPRIATIONS:
17 TOTAL EXPENSES 16 INCREASE IN LONG-TERM DEBT
17 DEBT SERVICE REASSIGNMENT PRINCIPAL
18 MINIMUM REQUIRED NET REVENUES 1/ 18 REPAYMENT OF LONG-TERM DEBT
19 PLANNED NET REVENUES FOR RISK 19 REPAYMENT OF CAPITAL APPROPRIATIONS
20 TOTAL PLANNED NET REVENUES 20 CASH FROM TREASURY BORROWING AND APPROPRIATIONS
21 TOTAL REVENUE REQUIREMENT 21 ANNUAL INCREASE (DECREASE) IN CASH
22 PLANNED NET REVENUES FOR RISK
1/ SEE NOTE ON CASH FLOW TABLE.
23 TOTAL ANNUAL INCREASE (DECREASE) IN CASH
1/ Line 21 must be greater than or equal to zero, otherwise net revenues
will be added so that there are no negative cash flows for the year.
BPA Integrated Program Review 24Transmission Depreciation & Amortization Expense
Rate Case Rate
$ in Thousands Actuals SOY Average Case IPR IPR IPR
FY 2006 FY 2007 FY 2008 FY 2008-09 FY 2009 FY 2009 FY 2010 FY 2011
Program Level Spending 171,359 175,584 184,472 194,382 198,535 190,648 200,810 211,538
Increase/Decrease * 4,225 8,888 14,063 (7,887) 10,162 10,728
* For FY 2006-2008, Rate Case FY 2009, 2010 and 2011, change is from the prior year. For FY 2009 Forecast, change is calculated from “Rate Case”.
• Depreciation is for revenue-producing assets such as lines, towers, and substations. Depreciation is calculated
using the straight-line method. The depreciation period for different assets varies by FERC account and depends
on factors for salvage value and removal costs.
• Amortization is for regulatory assets such as spacer-dampers and non-wires solutions. Amortization is calculated
using the straight-line method over 30 and 20 years respectively.
FY 2010 – 2011 Risks & Opportunities:
• This forecast applies the 15 percent lapse factor to all categories. The forecast will vary if the lapse factor
were to be applied differently.
See Financial Disclosure Statements on Page 2
BPA Integrated Program Review 25Transmission Net Interest Expense
UPDATED Rate Case Rate
$ in Thousands Actuals SOY Average Case IPR IPR IPR
FY 2006 FY 2007 FY 2008 FY 2008-09 FY 2009 FY 2009 FY 2010 FY 2011
Program Level Spending 136,761 133,806 127,850 130,828 164,941 132,283 150,623 168,664
Increase/Decrease * (2,955) (5,956) 37,091 (32,658) 18,340 18,041
* For FY 2006-2008, Rate Case FY 2009, 2010 and 2011, change is from the prior year. For FY 2009 Forecast, change is calculated from “Rate Case”.
The major components of Net Interest Expense are:
• Debt Service Reassignment interest. This represents the interest component of Energy Northwest refinanced
debt that has been assigned to Transmission for repayment as part of the Debt Optimization program.
• Interest on outstanding bonds and appropriations. For Transmission, bonds issued to the U.S. Treasury by
BPA are for capital equipment and the construction of transmission facilities. Congressional appropriations are
for the construction of transmission facilities.
• Interest credit. A significant variable is an interest credit associated with interest income from cash in the
BPA Fund attributable to Transmission cash flows.
• Amortization of certain cash events. These include the non-cash expenses for amortization of capitalized
bond premiums and the capitalization adjustment resulting from the BPA Appropriations Refinancing Act.
• Allowance For Funds Used During Construction (AFUDC). This is included to offset bond interest used to
fund assets under construction.
See Financial Disclosure Statements on Page 2
BPA Integrated Program Review 26Transmission Net Interest Expense
for FY 2010-2011 Rate Period
($Thousands) 2010 2011
Debt Service Reassignment Interest 55,458 55,429
Interest on Federal Investment
On Appropriated Funds 23,198 22,051
On Long-Term Debt 119,877 139,774
Interest Credit (19,000) (19,000)
Amort of Cap Bond Prem 758 692
Capitalization Adjustment (18,968) (18,968)
AFUDC (10,700) (11,314)
Net Interest Expense 150,623 168,664
FY 2010 – 2011 Risks & Opportunities:
• Non-Federal debt management actions can change the shape of Federal debt service when calculated in
the Repayment Study.
• Updates to the interest rate forecast can raise or lower debt service on projected borrowing.
• Cash in the Bonneville Fund that is attributed to Transmission affects the calculation of the Interest
Credit.
• The effect of the transition from the Interest Offset Credit (IOC) to Market-based Investing is not yet
known. The IOC will be phased out over 10 years.
See Financial Disclosure Statements on Page 2
BPA Integrated Program Review 27Transmission Non-Federal Debt Service Expense
Rate Case
$ in Thousands Actuals SOY Average Rate Case IPR IPR IPR
FY 2006 FY 2007 FY 2008 FY 2008-09 FY 2009 FY 2009 FY 2010 FY 2011
Program Level Spending (663) 2,121 3,380 8,804 11,544 6,886 5,890 4,690
Increase/Decrease * 2,783 1,259 8,164 (4,658) (996) (1,200)
* For FY 2006-2008, Rate Case FY 2009, 2010 and 2011, change is from the prior year. For FY 2009 Forecast, change is calculated from “Rate Case”.
• Non-Federal Debt Service for Transmission consists of interest that accrues on customer balances for
prepayments made for network upgrades related to Large Generator Interconnection Agreements (LGIA).
• Non-Federal debt service is directly associated with the forecast of LGIA customer balances. As customer
balances increase, debt service tends to increase. As balances decline, debt service tends to decline.
• The IPR forecast does not include a forecast of additional LGIA projects. If an updated forecast includes new
projects, non-Federal debt service expense will likely increase.
See Financial Disclosure Statements on Page 2
BPA Integrated Program Review 28Transmission Minimum Required Net Revenues
• As necessary, revenue requirements include a component, minimum required net revenues, to ensure coverage of
annual cash requirements. It is calculated as the amount by which BPA’s payments to Treasury for amortization
and irrigation assistance exceed the total of non-cash expenses and revenues.
MINIMUM REQUIRED NET REVENUES CALCULATION
($Thousands)
2010 2011 Average
1 CASH FROM CURRENT OPERATIONS:
2 EXPENSES NOT REQUIRING CASH:
3 FEDERAL PROJECTS DEPRECIATION 200,810 211,538 206,174
4 AMORTIZATION OF CAPITALIZED BOND PREMIUMS 758 692 725
5 CAPITALIZATION ADJUSTMENT (18,968) (18,968) (18,968)
6 NON-FEDERAL DEBT SERVICE 5,890 4,690 5,290
7 ACCRUAL REVENUES (LGIA) (11,276) (11,276) (11,276)
8 ACCRUAL REVENUES (AC INTERTIE/FIBER) (7,937) (7,897) (7,917)
9 CASH PROVIDED BY CURRENT OPERATIONS 169,277 178,779 174,028
10 CASH REQUIREMENTS
11 DEBT SERVICE REASSIGNMENT PRINCIPAL 12 154 83
12 REPAYMENT OF LONG-TERM DEBT 190,251 115,000 152,626
13 REPAYMENT OF CAPITAL APPROPRIATIONS 15,873 94,872 55,372
14 TOTAL CASH REQUIREMENTS 206,136 210,026 208,081
15 MINUMUM REQUIRED NET REVENUES (14 - 9) 36,858 31,247 34,053
• This calculation does not include a forecast of new LGIA projects and associated revenue credits. These values
represent actual credits distributed today.
• This calculation assumes the use of $15 million/year of reserves as a source of capital. If revenue financing were
used instead of reserves, MRNR would increase by a corresponding amount.
See Financial Disclosure Statements on Page 2
BPA Integrated Program Review 29Large Generator Interconnection Agreement
Transmission Credits
Rate
Case Rate
$ in Thousands Actuals SOY Average Case IPR IPR IPR
FY 2006 FY 2007 FY 2008 FY 2008-09 FY 2009 FY 2009 FY 2010 FY 2011
Program Level Spending 1,656 5,515 13,445 31,565 35,348 11,276 11,276 11,276
Increase/Decrease * 3,858 7,930 21,903 (24,072) 0 0
* For FY 2006-2008, Rate Case FY 2009, 2010 and 2011, change is from the prior year. For FY 2009 Forecast, change is calculated from “Rate Case”.
• The revenue forecast will include a non-cash revenue that matches transmission credits.
• The revenue requirement will include two expense categories:
• Interest accrued on the account balances (“non-Federal projects debt service”)
• Depreciation on the assets once they are placed into service.
• Originally, Transmission projected a higher non-cash effect to be higher because several projects were
expected to be energized (COI and Klondike Phase III) were not.
• We have limited the non-cash effect at this time to the projected annual credits for existing network
upgrade projects.
• The IPR forecast does not include a forecast of additional network upgrade projects.
See Financial Disclosure Statements on Page 2
BPA Integrated Program Review 30Large Generator Interconnection Agreement
Transmission Credits
• How is the credit balance calculated? It is the sum of:
• The total funds advanced by the customer to TBL for construction of the network upgrades.
• Interest earned on the total advance which accrues at the FERC rate beginning on the date
the funds are received.
• How are the credits applied?
• Currently Transmission business practice outlines two different methods of repayment of
transmission credits.
• Method one : When transmission services commence, Transmission Credits will be
applied to charges in the Interconnection Customer’s, or its assignee, monthly
transmission bill for Network Integration (NT) or Point-to-Point (PTP) transmission
service on a dollar-for-dollar basis at the applicable transmission rates that are in effect
when transmission service is taken.
• Method two: Upon the Commercial Operation Date of the generator, Transmission
Credits will be repaid to the Interconnection Customer, or its assignee, based on the
estimated output of the facility multiplied by the PTP Long-Term rate.
• If the customer’s credit balance is not fully depleted within twenty years, Transmission
Services (TS) will refund the balance in a single payment.
• The interconnection customer may assign the credits to another TS customer with NT or PTP
contracts so long as the generator is identified as either the POR or as a network resource in
the assignee’s contracts.
BPA Integrated Program Review 31Transmission Capital Lease Financing Expense
Transmission Leased Facilities Expense (includes all leases)
• The Leased Facilities Expense line item is part of Transmission’s Operating Expenses.
• This line item includes both capital and operating leases as well as and potential property tax liabilities.
• The lease expenses due to BPA’s capital leases in the lease financing program are:
• FY 2009: $10,305,750
• FY 2010: $10,820,752
• FY 2011: $11,363,159
• The capital lease forecast for FY 2009-2011 only includes signed leases.
• The capital lease forecast will increase for Initial Proposal because we entered into additional leases after the
forecast was prepared.
See Financial Disclosure Statements on Page 2
BPA Integrated Program Review 32Debt Management Actions BPA Integrated Program Review 33
Debt Management Actions – Debt Optimization
1. What is Debt Optimization?
• Energy Northwest replaces old bonds that are currently coming due with new bonds that will become due in the
2013 –2018 period.
• As part of this program BPA agreed with EN that BPA would use cash in the Bonneville Fund that would have
been used to pay the old EN bonds to pay off Treasury debt early in order to preserve/restore borrowing
authority. This additional BPA amortization is a necessary condition of the refinancings.
• The end result is BPA’s available Treasury borrowing authority increases. Also, because municipal tax-exempt
debt is typically less expensive than BPA’s taxable Treasury debt, overall interest costs go down.
2. Debt Optimization is working as intended by EN and BPA. The goals are to:
• Restore Treasury borrowing authority.
• Prevent any overall negative impact on rates.
• Minimize the cost of BPA’s overall debt portfolio.
Advanced Payments Due to Debt Optimization Projected
($ in millions) Payments
FY01 FY02 FY03 FY04 FY05 FY06 FY07 Total FY08 FY09
Generation $98 $266 $0 $141 $123 $133 $87 $847 $101 $166
Transmission $0 $0 $315 $205 $190 $204 $202 $1,117 $110 $50
Total $98 $266 $315 $346 $313 $337 $289 $1,964 $211 $216
See Financial Disclosure Statements on Page 2
BPA Integrated Program Review 34Debt Management Actions: EN Bond Transactions
• 2008ABC- March 25 Pricing
• Debt Optimization – $147 million
• Fix-out of under-performing variable rate debt – $226 million
• CGS new money – $50 million
• Implemented FY07-09 Power Services rate case promise to move debt to reduce spike in
2017, keeping rates down
• 2008DE- May 14 Pricing
• Traditional Refunding for Savings – $272 million (about $2 million in estimated annual
savings in the rate case years of 2010-11)
• This bond deal has not been included in the repayment studies and affects only Power
• 2008F- June 16 Pricing
• Replacement of under-performing variable rate debt with new variable rate debt – $209
million
• This bond deal has not been included in the repayment studies and affects only Power
BPA Integrated Program Review 35Access to Capital Update BPA Integrated Program Review 36
Treasury Borrowing Authority from the March 4, 2008
Access to Capital Presentation
3,000 3,000
($ in Millions)
2,000 2,000
1,000 1,000
0 0
2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027
(1,000) (1,000)
A: Base Case
(2,000) (2,000) B: Base Case +
B: Base Case + ML (2018)
ML (2018)
(3,000) (3,000)
E: Base Case +
ML (2027)
(4,000) (4,000)
(5,000) (5,000)
• In the Access to Capital presentation from March 4, 2008, we shared the above charts projecting the crossover
point for borrowing authority to be roughly 2015 for the base case and 2018 with the lease financing scenarios.
• Since then, we have updated our assumptions used in the borrowing authority analysis.
See Financial Disclosure Statements on Page 2
BPA Integrated Program Review 37Updated Borrowing Authority Chart
Agency Remaining Borrowing Authority
IPR Capital Submittal With and Without Lease Financing through 2027
3000
2000 Base Case Plus extended
Lease Financing Program
through 2027
1000
($Millions$)
0
2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027
-1000
-2000
Base Case
-3000
-4000
-5000
-6000
• Changes since the March 4th Access to Capital presentation include updated IPR capital expenditures, updated
repayment run amortization, and updated Lease Financing forecast.
• Capital spending forecasts increased significantly, while amortization changed little, which results in Treasury
borrowing authority being depleted about two years earlier in the both the Base Case and the Lease Financing
Scenario when compared to the March 2008 Access to Capital presentation.
See Financial Disclosure Statements on Page 2
BPA Integrated Program Review 38Treasury Borrowing Authority Modeling Scenarios
March 2008 Access to Capital Presentation June 2008 IPR Presentation
BASE CASE ASSUMPTIONS BASE CASE ASSUMPTIONS
• Capital forecast: 2008-13 consistent with 2009 President’s • Capital forecast: New capital forecast for 2009-2014; 2015-27
Budget; 2014-27 forecast is a shaped and escalated forecast. forecast is a shaped and escalated forecast. Total capital
Total capital projections for 2008-2027 is $11.2 billion. projections for 2008-2027 is $12.6 billion
• Under-run factor applied to Federal capital forecast • Lapse factor applied to Federal capital forecast for 2009-2014,
• Debt Optimization: 2008 = $211 million; 2009 = $216 million. no under-run applied for the outyears
Amounts are consistent with information shared at the 2008 • Debt Optimization: 2008 = $211 million; 2009 = $78 million.
annual DO meeting, and include advance + current refinancings. 2008 amount is consistent with the 2008 DO transaction and
• Revenue finance: Transmission = $15 million in 2008 and 2009; includes current and advance refinancings; 2009 includes only
Power = $0 advance refinancings for Power.
• CRFM projections: Power only, $577 million in total through • Revenue finance: Transmission = $15 million 2009-2011; Power
2015 = $0
• CGS new capital: Power only, $677 million in total through • CRFM projections: Power only, $721 million in total through
2019; level debt service 2020-24 2015
• CGS replacements: Power only, $4.7 billion plant, debt service • CGS new capital: Power only, $731 million in total through
starting in 2025 2024; 2009-2012 level debt service through 2020-24, 2013-2024
level debt service for 20 years
• Interest rates forecast: Official BPA forecast from 10/25/07
• CGS replacements: Power only, $4.7 billion plant, debt service
starting in 2025
• Interest rates forecast: Official BPA forecast from 10/25/07
BASE CASE + Lease Financing
• Same as above, except add Lease Financing projections BASE CASE + Lease Financing
through 2018 totaling $1.4 billion and 2027 totaling $2.3 billion
• Same as above, except add Lease Financing projections
through 2018 totaling $1.8 billion and through 2027 totaling $3.2
billion
BPA Integrated Program Review 39Lease Financing Overview BPA Integrated Program Review 40
Finding Access to Capital to Meet BPA’s
Infrastructure Demands
• BPA’s capital appetite across all areas of investment will eventually exceed BPA’s ability to
borrow from the Treasury.
• BPA has limited access to borrowing from the U.S. Treasury.
• BPA received a modest increase in Treasury borrowing authority in 2002 (Congressional
enactment). The likelihood of receiving more borrowing authority is low given the Federal
budget deficits.
• BPA was encouraged to use third-party financing arrangements to acquire capital.
• Simultaneously, BPA was encouraged to make infrastructure investments in light of the 2000-
2001 energy crisis.
• BPA has worked closely with the a focus group of the Customer Collaborative regarding its lease
financing program.
BPA Integrated Program Review 41Lease Financing Model
• BPA enters into a series of individual lease commitments with one or more bankruptcy remote
special purpose entities.
• BPA’s lease payment commitments are to be made regardless of whether the related facility is
completed, operable or operating.
• The third party irrevocably pledges BPA lease payments to the payment of bank loans or other
debt.
• The related project assets are not pledged as collateral.
• The third party initially holds title to the assets, but BPA obtains full benefit and use of the
assets.
• BPA pays all costs to operate and maintain the assets.
• At the end of the lease, BPA has the option to acquire title to the assets for a nominal charge.
BPA Integrated Program Review 42Lease Financing Structure
Lease Contract to
BPA as User Commitments Construct BPA as Builder
Third Party
BPA BPA
(Title Holder)
Lease Payments Construction
($) Draws
($)
Debt Service Capital
Payments ($)
($)
Bank Facility or
Bond Holders
BPA Integrated Program Review 43Project Criteria
• Capital work order estimate greater than $500 thousand loaded (~$365 thousand direct)
• Temporary threshold
• Project contains at least one tagged and tracked asset
• Low likelihood of moving the asset
• Assets with long design lives
• Inventory usage expected to be less than 25 percent of the material costs and less than 10 percent
of the total project costs
• Excludes retirement activities, land acquisitions, and access roads
BPA Integrated Program Review 44Lease Financing Program Status
• In FY 2007, BPA used the lease finance program to finance 10 projects that will preserve
roughly $45 million in Treasury borrowing.
• In FY 2008, BPA used the lease financing program to finance 17 projects that will
preserve roughly $60 million in Treasury borrowing.
• The average weighted all-in borrowing rate for transactions we have entered into for the
27 projects is about 70 basis points above the agency borrowing rate.
• Due to the recent turmoil in the credit markets, it is likely that the rate differential will
become larger, at least in the near term.
BPA Integrated Program Review 45Federal Columbia River Power System (FCRPS)
Total Liabilities to Federal and Non Federal Parties as of 9-30-07 1/
Energy Northwest ($ in millions)
BPA Appropriations
$5,314
Wtd. Avg. Int. 5.1% Generation Transmission $564
Wtd. Avg. Int. 7.2%
Corps of Engineers
Appropriations $2,528
Wtd. Avg. Int. 6.3% Other Non-Federal
Projects $171
Wtd Avg. Int.
5.5%
Lower Snake Fish and Wildlife $231
Wtd. Avg. Int. 7.1%
Other Non-Federal Bureau of Reclamation Bonds Issued to
Projects $205 Bonds Issued to Treasury $1,464 Energy Northwest 3/ $861
Treasury $777 Appropriations $627 Wtd. Avg. Int. 5.4%
Wtd Avg. Int. 4.9% Wtd. Avg. Int. 6.9% Wtd. Avg. Int
Wtd. Avg. Int. 5.2% 5.6%
Power Marketing Transmission Total
Liabilities WAI Liabilities WAI Liabilities WAI
Outstanding Rate Outstanding Rate Outstanding Rate
($millions) % ($millions) % ($millions) %
Total Appropriations 2/ $3,386 6.5 $564 7.2 $3,950 6.6
Total Bonds Issued to Treasury 777 5.2 1,464 5.6 2,241 5.5
Total Federal Liabilities 4,163 6.3 2,028 6.0 6,191 6.2
BPA Liabilities to Non Federal Parties 3/ 5,519 5.1 1,032 5.4 6,551 5.2
Total FCRPS Liabilities $9,682 5.6 $3,060 5.8 $12,742 5.7
1/ Does not include irrigation assistance liability of $735 million at zero percent interest ($53.9 of this amount is for Lower Teton, for which the
Administrator has no obligation to recover costs). “Liabilities” on this page do not directly relate to “liabilities” as reflected in the Combined Statements
of Capitalization and Long-Term Liabilities.
2/ Appropriation amounts exclude appropriations for construction work still in progress (CWIP). 2007 CWIP for appropriations was $304 million.
3/ Transmission principal is different from the Transmission Services (TS) Federal repayment obligation due to: 1) premium bonds issued, 2) timing difference
3) transactions costs. TS is assigned the repayment obligation for these items, which equals the additional Federal prepayment made on TS's behalf.
This information made publicly available by BPA in November 2007 and is consistent with BPA’s FY 2007 Annual Report. Any
variation is due to rounding .
BPA Integrated Program Review 46Workshop Schedule
Workshop # Dates Time
1 Executive Welcome and overviews Th. 5/15/2008 9am-3pm
Executive welcome, introduction and process overview
Power overview
Transmission overview
2 FY 2009 Power Costs Th. 5/15/2008 3pm-4pm
Overview, schedule
Miscellaneous small program changes
3 Asset Management Overview Tues. 5/20/2008 9am-9:30 am
Agency services Costs 9:30am-12pm
4 Power’s Internal Operating Costs Tues. 5/20/2008 1pm-4pm
Power’s Transmission Acquisition
Residential Exchange
5 Fish and Wildlife Capital/Expense MOA costs overall, and changes to FY 2009 F&W Wedn. 5/21/2008 9am-12pm
Program costs, and Columbia River Fish Mitigation Investment.
6 Corps/Reclamation - Capital/Expense Part 1 of 2 Wedn. 5/21/2008 1pm-4pm
7 Conservation and Energy Efficiency - Capital/Expense Th. 5/22/2008 9am-12 pm
Renewable Resources Program
8 Columbia Generating Station Th. 5/22/2008 1pm-4pm
9 General Manager Meeting on 2009 costs Wedn. 6/11/2008 1pm-4pm
(Steve Wright attending 2pm to 4pm)
10 Fish and Wildlife Capital/Expense with emphasis on FY 2010-2011 F&W program Th. 6/12/2008 9am-12pm
costs, hydro ops, Lower Snake River comp. Program, Columbia River Fish Mitigation
Investment and NWPCC
12 Depreciation, Amortization and Interest, and Debt Management Th. 6/26/2008 9am-12pm
13 Transmission
Transmission Expenses
Transmission Capital Th. 6/26/2008 1pm - 5pm
15 Close-out meeting on FY 2009 Power Costs Wedn. 7/2/2008 8:30am-9:30am
14 General Manager meeting on 2010-2011 costs Wedn. 7/2/2008 9:30am-11:30am
(Steve Wright in attendance)
BPA Integrated Program Review 47Integrated Program Review Process
Ways to Participate
• All forums are open to the public and will be noticed on the IBR external Web site at:
http://www.bpa.gov/corporate/Finance/IBR/IPR/
• All Technical and Managerial workshops will be held at BPA Headquarters.
• The comment period for FY 2009 Power Costs opens Thursday, May 15, 2008 and closes Thursday,
June 19, 2008.
• The comment period for FY 2010 and beyond opens Thursday, May 15, 2008 and closes Friday,
August 15, 2008.
• You have several options to provide comments to BPA:
1. Attend one or more of the meetings listed above and give BPA your comments.
2. Discuss your input with your Customer Account Executive, Constituent Account Executive, or
Tribal Liaison.
3. Submit written comments to Bonneville Power Administration, P.O. Box 14428, Portland OR
97293-4428.
4. Submit comments via e-mail to: comment@bpa.gov or submitted on-line at:
http://www.bpa.gov/comment
5. Comments can also be sent via fax to (503) 230-4470.
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